Business Briefing

Published 10:00 pm, Monday, January 23, 2006

REGIONAL NEWS

Wamu's top executives in line for bigger bonuses

Washington Mutual Inc., the biggest U.S. savings and loan, increased the amount of cash bonuses that Chairman and Chief Executive Kerry Killinger and other top executives can receive.

Under a new bonus plan, the Seattle-based thrift's executive officers can get a cash bonus this year worth up to 350 percent of their annual salary, Washington Mutual said in a regulatory filing with the Securities and Exchange Commission.

For Killinger, the new criteria would result in an increase in his cash bonus to $3.5 million from $3 million, based on his base salary of $1 million last year. Chief Financial Officer Thomas Casey's bonus could reach up to $2.1 million. His targeted bonus was $1.1 million last year.

Actual payouts will depend on how the company's earnings per share, non-interest expense and customer service performance match with targets established by the board of directors' human resources committee.

New affordable rental housing for Pioneer Square

Seattle's Pioneer Square neighborhood is slated to get new affordable rental housing when the 13-story Fortson is completed in 2007, a project investor said Monday.

Homestead Capital said the $26.6 million development at 201 Yesler Way would offer 132 studio and one-bedroom units and 1,500 square feet of retail space. Homestead, which is investing about $10.8 million in the project, said the housing is geared for service workers, people with entry-level office jobs and people with disabilities.

Frontier Financial Corp. reports higher net income

Frontier Financial Corp. reported fourth-quarter net income of $14.3 million, or 50 cents a share, up from $11.5 million, or 41 cents a share, in the year-ago period. The Everett-based parent of Frontier Bank said loan growth driven by residential real estate construction and land development, as well as higher interest rate margins, contributed to improved earnings for the quarter and the year.

Frontier also said shareholders of NorthStar Financial Corp. will vote today on a proposed acquisition by Frontier. That deal would add Frontier's 42nd and 43rd branches, in Ballard and Fremont. Frontier has $2.6 billion in assets.

Hoquiam-based Timberland Bancorp reported fiscal first-quarter net income of $2 million, or 55 cents a share, up from $1.5 million or 40 cents a share a year ago. Timberland operates 19 branches and has $548 million in assets.

NATIONAL NEWS

Tyco's chief executive pulls in $16 million

Tyco International Ltd., which plans to split into three companies, awarded Chairman and Chief Executive Officer Edward Breen about $16 million in compensation in fiscal 2005. Breen's pay included $1.57 million in salary, a $1.48 million bonus and more than $6.7 million in stock options based on their present value on the date they were granted, according to a filing with the Securities and Exchange Commission Monday.

KKR hires leader for its Chinese investments

Kohlberg Kravis Roberts & Co., which is raising more than $10 billion for a new buyout fund, hired David Liu, the former co-head of Morgan Stanley's Asian private-equity unit, to lead its investment activities in China. Liu will be based in Hong Kong, where he worked for Morgan Stanley, KKR said Monday in a statement. The New York-based firm in October named Deryck Maughan, former vice chairman of Citigroup, to oversee its expansion in Asia.

Northwest Airlines workers to vote on pay cut

Northwest Airlines Corp. baggage handlers, airport workers and reservations agents will begin voting next week on a 12 percent pay cut that the carrier proposed earlier this month. The proposal also would result in layoffs for 1,800 to 2,600 employees, said Bobby De Pace, who leads the Machinists union district that represents the 14,500 Northwest workers. The new contract would help the airline save $190 million annually, he said in an interview.

EARNINGS NEWS

American Express posts 12% profit increase

American Express Co., the No. 4 U.S. credit card issuer, said quarterly profit rose 12 percent as consumers bought more goods and services using its cards, boosting fees from merchants. Profit from continuing operations climbed to $751 million, or 60 cents a share, from $669 million, or 53 cents, a year ago, the New York-based company said Monday in an e-mailed statement. Analysts surveyed by Thomson Financial expected, on average, 59 cents. Both periods exclude results from Ameriprise Financial Inc., the brokerage unit spun off in September, and a tax-services business sold in 2005.

Bank of America shows first profit decline in years

CHARLOTTE, N.C. -- Bank of America Corp. posted its first profit decline in years Monday, missing Wall Street's expectations as consumer bankruptcies and weaker trading results cut into its fourth-quarter earnings. The Charlotte-based bank said net income for the quarter totaled $3.77 billion, or 93 cents per share, down from $3.85 billion, or 94 cents per share, a year earlier. Excluding merger and restructuring charges of $59 million before taxes from its acquisition of credit-card company MBNA Corp., Bank of America would have earned 94 cents a share in the latest quarter.

WORLD NEWS

Space race boosts the bottom line at EADS

The European Aeronautic, Defense and Space Co.'s space division earned a 2005 profit as telecommunications companies' and governments' growing demand to send satellites into space boosted revenue by 4 percent. Sales last year at EADS Space, which makes Astrium satellites and holds EADS' stake in the Arianespace rocket-launch joint venture, rose to 2.7 billion euros ($3.3 billion), Remi Roland, a spokesman at the Paris-based division, said Monday, confirming remarks EADS Space President Francois Auque made to the media Friday. The business won't release earnings figures for 2005 until March 8, when EADS publishes figures.

SHIPPING NEWS

Vessels due at the Port of Seattle today, according to the Marine Exchange of Puget Sound, include the YM Ibiza, from Yokohama, Japan, at Terminal 18-2. Vessels expected Wednesday include the Pioneer, from Canada, at the BP fuel dock.